Iranian trade with India hit by insurance delay

The delays had occurred because New Delhi had not yet extended approval for Iranian underwriters to provide insurance for container and tanker vessels calling at Indian ports, they said.

European Union sanctions targeting Iran’s disputed nuclear program have meant insurers based in Europe - who account for the majority of cover for the tanker market - cannot insure Iranian oil and other shipments, leading to the emergence of new, untested insurance providers.

A three-month approval by India for Iran’s Kish P&I and Moallem Insurance Co to cover container and tanker vessels calling at Indian ports lapsed on September 27.

Three oil cargoes were on vessels waiting at anchorage to call on Indian ports, while several container ships were stranded at the Iranian port of Bandar Abbas, oil industry and shipping sources said.

Two Iranian vessels carrying oil for Indian refiner Essar Oil—Sundial, an aframax sized tanker, and a very large crude carrier Sunshine—were waiting at an Indian port, the sources said. Another aframax, Superior, for Mangalore Refinery and Petrochemical Ltd’s, was also at anchorage at an Indian port, they said.

MRPL, which aimed to get five aframax-size cargoes from Iran this month, had complained to India’s oil ministry about the delay in the shipping ministry granting approval to Iranian underwriters, the source said.

Ad Hoc Permission

Essar and MRPL had written a letter to India’s shipping ministry seeking ad hoc permission to bring in Iranian oil tankers, the oil industry sources said.

MRPL managing director P.P. Upadhaya declined to comment and Essar Oil officials were not available to comment.

It was not clear why the shipping ministry had not yet made a decision on whether to extend approval to Iranian P&I Clubs.

India’s shipping secretary, the most senior bureaucrat in the ministry, was not available for comment.

India had sought a letter from Iran’s finance ministry in support of previous letters written by its former industries, mines and trade minister and oil minister on providing sovereign guarantees for its clubs.

Mohammad Parizi, Iran’s Deputy Minister for Banking and Insurance Affairs, wrote a letter on September 20 outlining federal support for Moallem Insurance Co and its newly established sister firm Qeshm International trust Alliance (QITA) and Kish P&I clubs.

“(These) insurance company and P&I Clubs are regulated by the law and regulations, supervision of Central Insurance of I.R. Iran and are under full backing of the Government Specific Reinsurance Fund,” said the letter, which was seen by Reuters.

About 1,000 containers were waiting at Nahva Sheva port in western India with supplies going to Iran, a shipping agent with direct knowledge of the matter said.

In addition, three bulk vessels were waiting at Iran’s Bandar Abbas port to load agricultural products such as rice, soymeal from India’s Kandla port on west coast.

India imported $11.59 billion of oil in 2012/13 from Iran, while its exports to Iran were worth $3.35 billion, according to the commerce ministry website. (Reuters)